OptionsHouse

Options Trading News

October 3, 2012  Wed 3:47 AM CT

DBA: SEE CHART GET CHAIN FIND STRATEGIES
The PowerShares DB Agriculture exchange-traded fund has pulled back after running higher with this summer's drought, but one trader is looking for a return to the stock's 52-week highs.

optionMONSTER's Heat Seeker system detected the purchase of 3,900 November 31 calls for $0.20. That volume dwarfed open interest of just 44 contracts in the strike at the beginning of the day, clearly indicating a new position.

DBA rose 0.41 percent yesterday to close at $29.54. Shares have fallen since hitting a recent peak of $30.87 in mid-September but seem to have found support around the $29 level.

Yesterday's trade is betting that the fund will return to its highs from October 2011 by expiration next month, a gain of roughly 6 percent from current level. If the premiums on the long calls gain before then, the trader could sell them for a profit and exit the position early.

Total option volume in the name was more than 3.5 times its daily average. Only 60 puts traded in the entire session, a reflection of the day's strongly bullish bias.
Share this article with your friends


Invest Like a Monster - Las Vegas: March 13-14

Premium Services

Webinar Recording

Turbo Charge Your Trading Profits

Education & Strategy

The Strike-Based Greeks

The other Greeks (Gamma, Vega, and Theta) are calculated by using month and strike data, and not by individual option. These are called strike-based Greeks. Gamma, Theta, and Vega are all strike-based Greeks

View more education articles »